tv Trending Business Bloomberg October 28, 2015 10:00pm-11:01pm EDT
access in india. the only thing facebook users want is an invitation. he said that is what people care about, we will do it. let us know what you think of today's top stories. follow me at twitter. the jakarta session just about getting started. where having a look at what else is going on in the asia-pacific, having a look at how the markets are really doing. mode are in wait and see in the beginning of the week as we waited the federal reserve. now we await the bank o japan. the bank of new zealand releasing its decision as well. you are seeing a mixed picture. gains in north asia. the nikkei trading lower in hong kong and shanghai. the in markets in wellington and australia. you're seeing again in the wellington market. sydni down.
sydney is down. the big story want to get to is nintendo. we have seen a dramatic drop for nintendo shares. take a look. that dropped as much as 9%. this comes as nintendo has reported results yesterday. it planned to release its first smartphone game this year. it has delayed that release to march the shares falling after that. the president of the company has promised details of the mobile plan. it looks like the smartphone game release will be delayed. that raises questions about sony's execution, about the pipeline for these products given the fact mobile is so strategic. important for companies because that is where consumers are using these games, these applications. we want it on mobile devices. nintendo needs to deliver on that. shares coming off on that. as we look at leisure goods in
japan, 15 stocks falling. nintendo leads that list with a 9% drop. we will continue to follow that among other consumer electronics companies in the region. rishaad: absolutely. we have a that, five-month share on samsung shares. the company is worth $8 billion more than yesterday. it did come out with disappointing results. the big news is the money they are giving back to shareholders. david is on this for us. david? david: we are off the highs of the day. it is up 3.5n points. samsung accounts for about nine points of the game. if you still that off, it would be down six points roughly. deep pulling out $10 billion for shareholders, it
announced the buyback before the markets opened. as many as four brown's perhaps. the first round they will be spending over $3.5 billion. the shares will be canceled thereafter. 30-50% of the money will be coming from its free cash flow. at least 30% of free cash flow. also considering a quarterly dividend perhaps starting next year. that is one part. the other party's that missed estimates on that income -- the other part is that it missed estimates on that income -- net income. sales came in like this just over $45 billion. we have converted that from south korean currency. that came in just under $6.5 billion. they put up guidance suggesting this current quarter will see a decline. let's have a look at the mobile
business which makes up half of the revenues. this is according to the idc. it did maintain its dominance last quarter. this is market share based on the number of units sold in the third quarter. while it does maintain dominance, the big winner shipped 60% more compared to last year. there we go. that is the year on your comparison on how much they shipped last quarter compared to what they shipped same time last year.
was well above estimates. they are expecting a contraction in three consecutive month of contraction. production did fall on year, dropped .9%. companies expect growth to continue. thanks for the 4% jump before dropping back .3 percent in november that does not change the fact that uncertainties are high for the outlook of japan's economy and may ease fears the company entered into a second recession since the prime minister took office. it is still far from the 2% inflation target. additional easing still remains a question of when, not if. economists still split on what the governor will do tomorrow as we see its biggest trading partners continue to ease.
they cut rates for the sixth time. the e.c.b. president signaling the central bank will add stimulus in december. keep in mind, we are expecting reports on japan hiring, spending, and inflation before that decision. no doubt all eyes on that central bank meeting tomorrow. press conference in the afternoon. rishaad: a story we are following is how indonesia's forest fires have been one of the biggest climate polluters. this is on bloomberg.com/asia. later, expanding his reach. we will find out why mark zuckerberg is trying to increase access in india. companies are increasingly going green. our next guest says crude is here to stay. we will hear from the vice president of norway's biggest oil company. you are watching "trending business." ♪
>> welcome back. these are the stories making headlines around the world. iran has underlined its growing influence by joining in on the future of syria. the prime minister will be in vienna tomorrow at the invitation of the u.n. iran has backed president assad against rebel groups, some supported by saudi arabia. it has sparked one of the biggest refugee crises in history. hundreds of thousands of people are intemperate caps or seeking a new life elsewhere. the leaders of south korea, china, and japan will meet sunday for the first trilateral summit in more than three years. the president will host the prime minister in a sign of warming relations. on monday, they will meet one-to-one for the first time. links with tokyo remain strained sex lacedse of korean
in the japanese occupation and the drive to beef up japan's armed forces. have caused a choking haze across much of southeast asia and have also made indonesia the world's worst global warmer. they are exceeding those of china and the u.s. on a significant number of days. they are clearing land for farming implication. world resources institute says the fire could add 3% to global greenhouse emissions this year. leaders willal meet in paris in december to forge a deal on bonding targets to ensure global warming does not kill the planet. greenhouse gases from burning fossil fuels is seen as the big problem by environmentalists. let's get the view from one of the leaders in world energy. he is the chief economist of norway's biggest oil company. he joins us now from singapore. thanks for joining us. we have seen all these different
ways of producing oil, fracking, etc. it is a big challenge. how fast is demand growing? i'm sure most of the demand growth is coming from this part of the world, the asia-pacific. >> that is true. most of the energy demand growth and oil demand growth is taking place in emerging economies and in particular in asia where economic growth is higher than elsewhere and where there are more people. that is where the underlying energy demand growth is strongest. rishaad: despite these climate change goals, we want to reduce how much oil and gas we are consuming. we have got fairly stringent targets in mind. what happens with demand for oil in the next 25 years? think it is possible to achieve the two degree target
in terms of co2 emissions. it is extremely challenging. for that to happen, we need a rapid change in the global energy mix. in spite of that, there is room for oil and gas in the target. in our forecast, we will have about the same amount of oil and gas demand in 2040, even if we reach the two-degree target as we have today. that means about 15% less oil. that 15% more gas -- but 15% more gas. for the oil and gas industry, we can continue to deliver the energy the world needs. and at the same time, contribute to reaching the target by switching to new renewables readily. but at the same time we have to deliver 50 million barrels of new oil because of the decline rates in existing fields, we have to replace oil to deliver the demand, sufficient
production for the man -- demand. 50 million barrels of new oil by 2040 is a huge challenge. we have to discover oil, we have to invest. that is the double challenge we have. it is to deliver enough energy which the world needs, and at the same time tackle the co2 intensity and get that down. rishaad: you're talking about four or five times the amount saudi arabia produces each day and perhaps what the u.s. and russia too. you've got to replace all of that. where is it going to come from? it is going to come from a lot of different places. we are going to see growth in particular in the middle east. that is where the reserves and potential resources are largest. we are going to see new resources coming out of iraq and iran.
saudi arabia will continue to produce high levels and potentially gradually try and get it slightly higher. we will see more shale oil coming out of the united states. we are going to see more oil coming out of brazil. we are going to see a lot of fighting of decline trying to stem the decline in the mature resources like in the north sea and elsewhere. it is about russia as well. new provinces, old provinces. we will have to keep the production stable as possible in order to deliver enough energy. and at the same time avoid producing too much because then we will have too much global warming. will go also, prices down and you will not make as much money. what happens with prices? do they remain the same? we are seeing some $50 a barrel now. how long can that be sustained? longer-term, it has got to go higher? eirek: that is right.
we believe it will gradually come up. the current levels are unsustainable. they are too low in terms of stimulating too much demand and reducing production too much. you will have a gradual tightening of the market. they can last for a while now because storages are full. there are short-term and medium price term mechanisms put out a play with so much storage. gradually, it will start to come down and the price mechanism will be replaced and prices can come up. it is impossible to say how rapidly and when it happens. we will still have a lot of volatility in the market where the price can go up or down. the long-term trend will lead to slightly -- to a gradual increase in higher prices than in a two degree world, we will meet higher prices than what we are looking at today. kat: absolute -- rishaad:
absolutely. there is a certain point where it becomes a gain. you have an incentive to invest and find those alternate oil sources you are mentioning. eirek: yes, exactly. currently, the industry is struggling to get the cost levels down, to do things differently, to increase the focus on standardization, etc. that will have medium-term and hopefully also long-term consequences in terms of the cost levels we need to replace production. once we have done that, slightly higher prices will give incentives for new investments. there is a need for the energy we are delivering. to beis a need for gas replacing some call -- coal to get the co2 intensity down. by changing the way we work with suppliers, we will be able to deliver resources at slightly lower cost than previously.
therefore, we could have a normal rate of return at prices that don't have to be $120 as we saw in the past. ,ishaad: thank you very much joining us from singapore on the prospects of the oil industry through the next couple decades. next, sales dropping at a record pace. the stock taking a kicking. woesupermarket chain's when we come back. ♪
rishaad: you are watching "trending business." shares of the australian retailer are under serious pressure after the company announced more weak sales figures and lowered profit expectations. let's find out how bad these numbers were. what is going wrong? >> not much is going right. the chief problem i suppose is woolworths has no chief, they are without a permanent c.e.o., so that is something they are looking at. sales figures for the first quarter were abysmal, down 2.5%. food and liquor sales were off 1% for the same store. that is worst than the market was expecting.
.7% drop had been anticipated. worst of all was the forecast for the profit, off 28-30% down to between $900 million and $1 billion. as a result, the stock is getting hammered today, off almost 10% at the moment. woolworths in the picture has been struggling with competition. not only from low-cost aldi but also kohl's. hl'sthe same period, ko managed to grow by 6%. the same recipe for success seems to be eluding woolworths. tting a c.e.o. might help. rishaad: let's look at financials. out with another record your profit. not the bloated expectations. it was below those, i think. >> it never seems to reach the
giddy heights analysts expect. it is the same story with all banking stocks in australia. that was the sixth record profit in a row, up 1% the cash profit to $7.2 billion. analysts had been expecting $7.32 billion. we have a situation where shares are being sold off today, currently down .3%. the dividend of $.99 is the same as last year. there are more shares out as well due to the capital raising all the banks are having to engage in. more broadly, there will be headwinds from competition and the increased regulation. a few challenges for the incoming c.e.o. rishaad: thanks, paul allen. in sydney, let's look at earnings out. it is out with its figures as well. earning money abroad is looking more difficult, posting the
biggest loss in four years. the slump in trading and settlement of the lawsuit with the italian bank sees a $380 million loss. it will put a dent in their profit from overseas this fiscal year. despite that, overall net income smashing estimates. a week of central bank recalls -- bank calls has tiny easing. next, it will be japan's turn. we will look at what they might let the monthly policy meeting tomorrow. we will head over to the japanese capital to get an update. this is "trending business." ♪ the only way to get better is to challenge yourself,
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nintendo shares dropping the most in nine months after the comedies of its new smartphone game will not be released until march, the joint project was due this year. shares also slumping. and you know has risen 80% before today's plunge -- nintendo had risen 80% before today's plunge on announcement of the smartphone game. samsung soaring after canceling shares. news came after posted profits that missed estimates. price cuts on new smartphones
and sales away from the iphone. samsung is protecting further sales decline to the fourth quarter. it is saying it will consider a rate hike before the end of the year but declined to make a commitment. it left the benchmark rate unchanged. policymakers raised the growthlity based on realized and expected progress reaching goals. the vote was 9-1 in favor of delaying a move in the cost of borrowing. we are looking at a rate decision out of japan. our correspondent is in tokyo with a look at a lot of talk. stimulus increase that they have in place? >> good morning. it is one of the most anticipated meetings in some time. economists are split down the middle as to whether they will expand the program. the governor is dealing with a
mixed bag on the economy. on one hand, he has a soft economic picture. some economists said it would not be surprised if the economy fell into recession last quarter. exports are struggling. on the other hand, the labor market is tight. when you see the industrial production, that might hit at a pickup in terms of the factory floor activity. while it is a mixed bag, at the same time it is an inconclusive picture. that is why economists are divided on what might happen tomorrow. rishaad: ok. what are their options overall? >> well, they still have some options left. they have been in the qe game for quite a while, long before the e.c.b. and fed and others. some other options continue to be buying the government securities, even though they have gone a long way doing that
in recent years. they could expand their purchase in the e.t.f. sector. according to one baker, they could buy stocks outright. they have tools available. as long as the balance sheet continues to swell, that will bring up concerns because it leaves banks vulnerable to losses on securities and raises questions of sustainability. we are getting to the point where the bank of japan's balance sheet is bigger than the fed, e.c.b., and bank of england combined. it is not like they want to hurry on the program -- carry on the program of qe indefinitely. they need to be careful. rishaad: what happens if they don't do anything? that brings up the debate about whether the bank of japan is just pushing back there move until next year, maybe january is a window suggested by some economists. it puts the ball in the government's court and raises questions as to whether the
prime minister will step up on structural reform, whether they will push through with the much promised fiscal stimulus or do more to run the growth. -- rev up growth. it will put the focus on the government. beyond that, it is hard to roll out or say conclusively the bank of japan will not be easing again at some point. rishaad: thanks a lot for that interview. --in tokyo. let's have a look at what is moving stocks across the asia-pacific. looking at japan as it ended its lunch break. a lot of stocks moving. >> that is right. big news flow with japan. let's begin with that market. he was talking about the outlook. japan now trading lower by .1% today. let's dig into the equity movers. stocks turned around in many markets. we started out hiring hong kong and shanghai. movers, we are
talking about nintendo falling precipitously, down about 9% in the session. the mobile plan suffered a setback. the planned to offered its first -- offer its first smartphone game. it will be delayed until march 2016. that is driving shares down. now off the lows but still about 8.5% drop for nintendo. you want to watch that stop as investors question the ability strategye the when mobile is so important in the consumer space. film hast james bond had a better first day gross profit than "that's all." -- "sky fall." a curious move given the fact japan's travel sector has held up well. we have results from each japan railways and central japan rails.
east operates the bullet train services. airline operators saying revenues and profits up 51% year on year. in the chinese markets, this is what we are following in hong kong. shares of petro china rising. we are watching commodity prices. capitalng on the latest spending plan and how the input --affect output. watch that stocks. ensures the big group declining. china life down 5%. it's i-71 percent drop in profit. that is a big turnaround from the first half of the year when they did very well. finally, samsung electronics advancing in the session. we will get more on that in a moment. a few other stocks to brings your attention in south korea. the c.e.o. he sees a fourth-quarter profit.
company,e online web third-quarter operating profits outperforming. stock up 3% in seoul. rishaad: looking at samsung shares after they hit a five have month high announcing a $10 billion buyback, the biggest maker in mobile phones is still that. they did post profits that missed estimates. peter, how significant is this buyback? people saying it is more chunky than expected. >> it is a big deal. samsung has been struggling in the smartphone business. they have been losing market share to apple. there are chinese of starts -- that have been upstarts -- there are chinese upstarts that have been taking share away. investors were looking for the company to buy back some shares. this is the equivalent of $10 billion in shares they will buy back. they also said that will cancel the shares rather than hold on
to them. that is a big to because investors anticipated they were going to hold on to them to help with the transition to a new chief at the company. so it is a big deal. earnings,isappointing that is the thing in the background. you were telling me earlier they are not exactly upbeat on the future. >> that is right. they did miss the net income estimates for the quarter. they came in light. investors skittish because of the financial performance in the past. the smartphone business is struggling. that is a high-profile business they have. samsung also makes chips and displays. those businesses have been stronger. samsung said they are going to increase their capital spending, particularly in the chips business to meet some demand. the outlook they gave going into the next quarter is a little bit disappointing. they said profits will fall from the third order to the fourth quarter.
that is a surprise for analysts who had been expecting profits were going to increase instead. we will have to see how that plays out and whether the stock rally today will be sustainable. peter, joining, us from tokyo with the latest on samsung. let's have a look at the other stories we are following. crown resorts is going to spend $100million on 20% -- million on the luxury restaurant. willemaining 80% of nobu be held by existing owners including after robert de niro. emissions scandal have been a nightmare for the carmaker. it is proving to be a blessing for the south korean battery maker. investors are rushing to grab the stock making it the second most bought by foreigners. it has been driven up by 70% this year. analysts are betting this is going to continue.
also boosting the 2016 sales target 20%. test internet balloons. they will work with three telecom firms as part of the google plan to bring more of the world online and broaden the market for its services. test caseis a good for balloon technology because they have hundreds of violence. that has made it difficult for them to be connected using traditional cables. it has enjoyed more than 10 years as china's top search engine. lucid tour of the silicon valley operations -- emily chang had an exclusive tour of the silicon valley operations. speech recognition, artificial intelligence, all part of the work done here at the silicon valley arm of the chinese internet search giant. are in a unique
position to see the best ideas in silicon valley and from beijing and put them together to create things no one else has seen yet. behind the mastermind google brain, one of the most ambitious artificial intelligence projects to come out of google x. he made a big splash in 2014 when baidu reported him to run the silicon valley lab less than five miles away from google's headquarters. >> i'm excited about the potential to transform health care. i think there's a huge gap because -- between what we can do and what we have accomplished so far. we are working hard on that. >> what is next is one of the first projects to emerge from the deep learning unit, a medical doctor in an app. system has a lot of intelligence built into it. first of all, the speech part. people can talk to the app to
describe their symptoms. the system will use the speech voice recognition. they will decide if they can meet the need or see a doctor. >> this is part of the c.e.o.'s grand vision for baidu's future in online to off-line services or letting users connect with baidu three smartphones. it is a vision he believes in so deeply he is willing to bet billions of dollars, risk investor relations, and sacrifice profit today without a money back guarantee on future growth. >> in china, we see cellphones increasingly becoming a remote control for the physical environment around you. people are transacting more often online in china than the u.s.. >> to prove his commitment, baidu has tapped into its $12 billion cash pile on products like the personal assistant.
baidu is made more than a dozen investments in the last two years, including a $159 million stake in a group buying platform for on-site services. has set asideu $3.2 billion over the next three years for online to off-line research. that number is only expected to grow. >> i think if we could get speech recognition to a level where it was completely natural, where you did not have 90% accuracy, but like 99% accuracy, that would be totally transformative. >> emily chang, bloomberg san francisco. as indonesia, struggles to get a forest fires under control, the environmental trust continues to mount with criticism of jakarta's handling of the crisis. ♪
rishaad: this is "trending business." the forest fires choking southeast asia have pushed indonesia to the top of an unwelcome table. the daily co2 emissions exceed those of china and the u.s. put together. let's find out more and get over to our southeast asia correspondent. the smog is still generating headlines two months on. what is it like at the moment? >> still very smoggy here. the haze not just generating headlines. diplomatic flareups as well between international and -- indonesia and neighbors. also, outrage. climate analysts say it's unrestrained deforestation, what indonesia is doing is a bad message for the world. it is a signal countries can get away without real constraint. it is appalling. indonesia's carbon dioxide emissions exceeded china at least two weeks in the last two
months. they exceeded the u.s. for weeks out of six according to data we compiled from the world resources institute. remember, this is a threat to our health. it has disrupted activities as well, even business and flights in the region. all of this happening at a time when most countries in the world, 190 of them, are set to sign a new agreement to stop global warming. rish? rishaad: the fires have been around for years. the question is, is it particularly bad this year? >> it is. colin a climate catastrophe -- call it a climate catastrophe. if you refer to satellite records that started in 1997, this would be the second worst year on record for emissions from indonesian forest fires. 1997 was the worst.
the institute says the fires could add 3% to global greenhouse emissions this year. as you know, the smoke comes from illegal fires to clear land for farming and plantations. what is burning in indonesia is mostly peat accumulated over thousands of years and will not regrow unless there is a dramatic change in land peatlands, these will not be restored. it looks and sounds dire if you ask me. rishaad: thanks a lot for that in singapore. those fires still raging in indonesia spreading this haze across the malay peninsula. you can get more on that story anytime by downloading the app. let's check on stories making headlines around the world. china and the u.s. are to hold high-level talks today about growing tensions in the south
china sea. beijing was infuriated when washington sent the ship close to disputed islands. america said it was defending the freedom of navigation in international waters. china denounced the mission as a threat to national sovereignty. heads of the navies will talk by videoconference later. is excited to become house speaker today, in position to shape republican party policies for the for seeable future. ryan was just 28 when elected to the house in 1998. this year, he became the youngest chairman of the ways and means committee since 1861. the democrats will nominate nancy pelosi which means with the republican majority, ryan's election is a done deal. the decision to award the 2018 world cup to russia was taken before a vote. he said a discussion took place in 2010 to give the tournament to russia and the following want to america.
what is happening here? >> good morning. very interesting town hall style meeting yesterday in new delhi. tok zuckerberg speaking defend facebook's plans to expand access to the internet by offering a stripped-down version in india. internet.orgying which offers a stripped-down version of the internet had one million members in india and had brought online nearly 15 million people around the world who would otherwise not have had access to the internet. start, itat promising is difficult to verify statistics. the program has gone without too many complaints in india, the world's largest democracy. he was asked questions about why india was so important to facebook. facebook has about 130 million users in india, the
second-largest outside of the u.s. zuckerberg stressing yesterday the mission was to try and connect every person in india with each other. around one billion people in india do not have access to the hugenet and present a opportunity to the company and people who use it because zuckerberg claiming statistics show for every 10 people who use the internet, one person gets a job. job opportunities created. you were talking about candy crush earlier. that question was posted on asking how one ensures you do not get too many invites. andaid that was a concern he was working on it. rishaad: thanks very much. that is something they have been looking at, trending on social media. >> we all hate those candy crush requests. we get them a lot. every day.
what did mark zuckerberg say? itit was interesting because was a top question in the q1 of a -- q&a and was met with a round of applause and laughter. mark zuckerberg said it was intriguing. to me. i send a question to the head of development and they are going to get rid of this. at least, they placed to do so -- pledged to do so. someone asked the million-dollar question. other saying, do you check the account settings? >> i did years ago. turn it off. >> mark is still working on it? is mark up to date with facebook or not? zuckerberg did say there are tools that are outdated. they will find a way to get rid of it altogether. >> and all those annoying request. if you are playing those -- i won't go there. [laughter] >> youtube
in the world. it is the middle of the trading day across the asia-pacific. this is hong kong and this is "asia edge." rishaad: a look at our top stories. that sinking feeling, nintendo takes a plunge after pausing its new smartphone game. the president has said things were on track. samsung jumping on news of a $10 billion buyback. offset disappointing figures on
sales and revenue. a banking bazooka. stockpile bigger than that of the fed, e.c.b., and bank of england combined. >> also this hour, the road ahead. china's party elite wrap up their meeting in beijing. we are expecting details of the next five-year plan. a burning issue, the smoke from the legal forest fires sees indonesia becoming the world's worst polluter. it is affecting china and the u.s. -- surpassing china and the u.s. brainstorming for baidu. we have an exclusive tour of the incubator driving innovation for china's search engine. that report and much more in today's edition of "asia edge." >> keeping an eye on the markets on a day when asian stocks are paring their biggest monthly advance in six years. the yen up-to-date on the surprise in industrial production. and the wan